Friday, February 24, 2012

AT&T iPhone user wins data throttling case and $850, to boot

An AT&T iPhone user has won a decision against the wireless carrier, over throttling of his account, in a decision that could portend a rash of small claims cases by similarly disgruntled customers.

iPhone owner Matt Spaccarelli, who filed a small claims complaint against AT&T after it began throttling his data speeds, was awarded $850 on Friday by pro-tem Judge Russell Nadel. In the ruling, in Ventura Superior Court in Simi Valley, Judge Nadal said it wasn't fair for AT&T to sell him an "unlimited data" plan, and then throttle his iPhone data.

If this ruling were to stand, once could see an enormous impact, as although neither carrier sells unlimited plans any longer, grandfathered users on AT&T and Verizon do have unlimited plans still in place. Those users are subject to throttling, but AT&T throttles if a user is in the "top 5 percent." Verizon only throttles if the specific cell tower a "heavy user's" phone is communicating with is congested at that moment.

T-Mobile throttles when a customer oversteps his data tier, which means customers know exactly when they will be throttled. Sprint does not throttle, and is the only of the Big 4 U.S. wireless carriers to have both unlimited and unthrottled data.

In Spaccarelli's case, he was throttled after he had used 1.5GB to 2GB of data within one billing cycle. Due to a clause in AT&T's wireless customer agreement, one upheld by the Supreme Court last year, users are prevented from entering into a class action lawsuit or jury trials, leaving only small claims court and arbitration.

That may not be such a bad deal, however. Last month, Heather Peters won a small claims court lawsuit against Honda over its mileage claims for its Civic Hybrid. If she had joined a class action against the company, the best she could have done was between $100 and $200 and a $1,000 rebate coupon toward the purchase of a new Honda.

To determine AT&T's "penalty," Judge Nadel looked at the remaining 10 months in Spaccarelli's two-year contract with AT&T and estimated that he might pay an average of $85 a month for using additional data if he were on a tiered plan (AT&T charges $10 for every extra GB over 3GB).

Considering the possibility that Spaccarelli's victory might spur others to also file claims against AT&T, it's quite possible that AT&T will appeal. In fact, AT&T spokesman Marty Richter told AP that the carrier was "evaluating" the possibility.

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